Ten Steps To Review Your Workforce Effectiveness And Develop A Success Culture
An ugly expression, redolent of Private Equity (PE) that buys into businesses where they see they can get a much higher return from much reduced assets.
Executed ruthlessly…
But it’s worth noting how they work and what might usefully be learned from them when it comes to a small business’s people asset. Balance sheet-wise people are not an asset, but they are invariably the biggest cost so it’s not wrong to think of them that way.
So how does PE ‘sweat the people asset’ in the businesses they buy?
Well, here are the classics they deploy after they have cut the business (and people) to its core:
1. Business Plan
Sets out Objectives, Strategies and Actions for high performance in:
- New customer acquisition (Marketing)
- Customer retention (Operations)
- Operating efficiency (Systems)
- Productivity (People)
- Finance (ROI)
And sets success measures, dates, and names of those responsible.
2. Workforce Effectiveness
Survey customers and suppliers for frank opinions about:
- Knowledge
- Attitude
- Skills
- Aptitude
- Behaviour
Produce a schedule of the lacking areas
3. Knowledge, Aptitude, Skills, Attitude, Behaviour (KASAB)
Identify what’s needed to implement every part of the business plan, matching these to the deficiencies identified in the survey.
Targeted training by name.
4. Performance Management
- Create a job description for everyone, giving each a measurable part of the business plan for which to be accountable.
- Produce weekly/monthly KPI reports showing actual measures achieved and by whom.
- Quarterly/6 monthly individual performance appraisals to identify ‘KASAB’ deficiencies. Add solutions to the company’s rolling training plan, or ‘manage them out’
- Never connecting this process to pay review, or the results will be unreliable.
5. Career Development
Create clear pathways through and beyond the organisation for individuals to progress their pay and status based on their results. This gets the best people to join and make a massive contribution while they are there and/or moving up.
6. Workforce productivity
Benchmark output per person for the industry sector and control headcount to equal or better it. Set basic pay to be competitive and pay collective bonuses based on company productivity growth and profit.
Ally this to the introduction of business systems that reduce manual working.
7. Recruitment & Selection
Use job ‘speccing’ where a vacant job description is matched to an ideal personality profile and pursue targeted ads and headhunting.
Use demonstrable competence testing as part of the selection process.
8. Management Style
At the outset things are tough, so they start with a necessary ‘Reward and Punishment’ style to get the big changes implemented. Then progressing to ‘Assertive Persuasion’, followed by ‘Participation and Trust’ as workforce attitudes and overall competence grow.
Finally, the most competent and productive response comes from a ‘Common Vision’ style where everyone visibly does what they should do without being told or micromanaged.
An incremental approach to building a high-performance business.
9. Workforce Planning
Part of business planning, where the Objectives, Strategies and actions for Marketing; Operations; Systems; Finance are allocated to named people via their job descriptions, thus creating the People Plan, and containing all the other activities described above.
10. Employment Acts
Outside experts risk-assess the business’s exposure to legal claims and introduce policies that all employees and contractors must follow.
So what?
Well, it gets top business results, and its principles can and should be applied to a business of any size that wishes for better performance, even a sole trader.
It starts by posing these simple questions:
- Do I have a plan that spells out what I’m trying to achieve and how?
- Do I know enough to implement it?
- Do I measure my performance?
- Do I improve myself?
- Am I productive?
- Do I employ the best people?
- Is my management style effective?
Next step
Contact us to get a free people assessment and plan
Why is marketing so costly and why doesn’t any of it work?
They want to know how to stand out from the crowd and quite rightly, they perceive that marketing is the key to securing new clients. Whatever one is selling, the principles are always the same.
So, we started every discussion by asking them what marketing they had done so far. All had tried some of the following, and one had tried them all, (spending 3 years of profits doing so).
Here’s what they told us, and what had happened for them:
Emailing
Easy and free of charge but where do I get the contact base from? The list brokers sold me databases made so small by GDPR as to be worthless and the overseas ones sold me junk.
If we try Companies House, we can get all the businesses in our area but only 25% have phone numbers or emails and these are usually ‘info@’. It’s too time-consuming to clean them manually. (B2B)
If we try collecting email addresses from customers and lookers, they resist. (B2C)
Networking meetings
‘Spot the real business’. Everyone attending is an accountant, lawyer, web designer, social media marketer, IFA. They are all trying to sell to me so, waste of time.
A specialist built me a contact base. Lots of new connections but no business enquiries so far. I make the odd post that gets a handful of likes.
A specialist created and placed some ads. Several enquiries, all of whom just wanted to know the price, then hung up.
A specialist created and placed some ads and news. Several enquiries, all of whom just wanted prices.
Articles and blogs
A business writer had some success in getting these placed. Good for the profile but didn’t produce any enquiries.
SEO
A web developer built a smart site and lined up search terms she thought businesses would use. We are now on Google Page 1 for businesses like ours in this area. It brings enquiries, but the first question is “how much do I charge, I’m just shopping around initially?” Then nothing.
Sponsorship
I’ve supplied shirts with my logo to a junior football team and bought a sign on a busy roundabout. Expensive, but it did get a few good customers initially – school parents mostly.
Testimonials
The business writer did some customer write ups which does impress the prospects, but I can’t say it closed any sales in itself.
Trade shows
Very costly and lots of chat. It has brought the odd new client, but not worth it.
Customer surveys
Not enough of them respond to make it worthwhile.
Referral programme
I offer an Amazon voucher for introductions – but have handed out very few
Newsletter
Loads of work and abandoned after a few months
Videos
I don’t think I’d come over well enough. I’m no good at presenting.
Door drops
Tried that but they finished up in the bin along with all the pizza, cabs, restaurants, window cleaners’ flyers.
Seminars and Webinars
Tried one – only 2 people showed up
Brand management
Talking to marketing consultants who want to change the business name, design a new logo, and start again with a new website. Scary, lots of money, no guarantees of new revenue.
The bottom line
So, I have spent lots of money, mostly wasted, and I now want to know what guarantees your practice can give me about bringing me new customers!
Well…in many years of small business consultancy work
…the overwhelming demand we get is “get me more customers and it’s urgent”. Before accepting the job, we’ve learned the importance of taking a free look at what’s already been done. It ranges from absolutely nothing (“because we used to get referrals”) to all of the above list (“and now we’re broke because nothing worked”).
We then look at the rest of the business, reviewing its performances with customer retention (ie product/service quality); operating efficiency; people productivity; profitability and cash flow. Which some business owners think odd.
Why look at everything?
Because lack of sales is often the tip of an iceberg. There is little point in getting more orders if the product is troublesome, systems inefficient, people unproductive, customers not paying, bank calling in loans.
So, having done so, we will often have to say “we can help you, but only if you give us time. If you don’t have time, we’ll have to start with an overall survival strategy to buy the time to implement the right marketing and be able to properly service the customers”.
Why time?
Because it takes a new business that does all the right things time to get a flow of new customers. And in that regard, any business without new customers might as well be a new business, although it does have some advantages to help things to happen quicker.
The average buyer of a new service or product looks at it 10 times over the course of 6 months before deciding, unless desperate (and do you really want desperate customers?).
The finding of good new customers does not happen quickly.
So, you need a business that is operating effectively to take advantage of the orders when they do arrive and then pleases customers enough to order more and tell their friends.
And that’s why Business Dashboard® technology was born
…to rapidly assess any business ‘across the board’ performance before embarking on a project of any sort to make sure of doing the right things.
To see this working Book it here and we’ll assess your business online for free in a 20-minute demo.
Meanwhile, why did all those businesses fail with all their marketing costs?
The recurring themes were:
- No research into where / who is their ideal client /customer
- Assumed knowledge of what they wanted
- No predeveloped solutions that clients/customers would pay for
- Lack of a clear plan of how to reach and help them
- Too many random marketing tactics (no strategies)
- Short-lived initiatives that never embedded (the average trial period was 4 months)
- Not focusing on and sustaining the few key things that really work
- Not understanding how long marketing takes and giving up too soon
- No selling process – it’s very different to marketing
Our solution is 200 ready-made practical action plans that fix all these and more. They cost very little time or money to implement because they are automated versions of what raised the international competitiveness of one million small UK businesses from 21st to 7th place.
The Small Business Productivity Problem
The UK’s biggest businesses (6%) produce 65% of GDP, employing 50% of the workforce, whilst our smallest businesses (94%) produce 35% of GDP from the other half of the workforce.
The government commission that investigated the small business productivity problem in 2018 quickly concluded that lack of business systems was the single biggest cause of this wide gap.
Oddly, they did not propose a strategy to make that happen, but they might have suggested that the government fund the purchase, installation, and training of a full *ERP system for every small business with tax incentives to ensure daily usage. A small objection, though, would be the likely £100bn bill fundable only by a guaranteed surge in GDP of £1tn to pay for it.
But businesses could do this themselves by taking a steady, piecemeal approach and at a fraction of the above costs by using apps. So why don’t they do the obvious and buy and use more systems?
The following are collectively the reason:
- Natural resistance to change
- Clinging to the easiness of familiar manual methods
- Perceived cost
- Fear of complexity
- The apparent loss of control
- Distrust of suppliers
- Bad experiences
- Data security
- Lack of self-confidence in matters digitalThese attitudes will fade as digital natives (currently aged under 35) start their businesses at the age of 40.
But with the average age of business owners today at 50 and their retirement age at 70, we are 15 years away from 50% of the business owner population automatically thinking systems as the foundation of an efficient and productive business.
And even then, that 50% will still be producing less GDP than the mature 50%.
Therefore, an evolutionary turnaround in productivity is a long time coming, and without a strategy to accelerate it, the UK will be left behind on its post Brexit, post-COVID island.
How can that be avoided?
The solution can realistically only lie with accountants as they are solely the agents with trusted access to most of the UK’s small businesses and the credibility to influence them.
We already know from accountants partnered with Runagood® exactly which systems are lacking because of their daily online assessments of all types of small businesses. These are the answers they are obtaining (with proportions in brackets):
Marketing systems in use
- Estimating/ Quoting (20%)
- Contact Database (10%)
- Social media management (10%)
- Ecommerce (5%)
- Interactive Website (20%)
Operations systems in use
- Project management (10%)
- Stock Control (5%)
People systems in use
- HR management (5%)
Finance systems in use
- Online Accounting (45%)
- Management accounts (5%)
Business systems in use
- Cloud Backup (50%)
- Microsoft office/equivalent (90%)
- Business performance reporting (10%)
Given that the average system compared to a manual method performs at twice the speed and accuracy, there is a huge gain to be had here simply based on these typical businesses.
Bought as online apps and installed personally (rather than from a high-cost IT consultant), all these together cost around £40o per month. A lot for a small business but not when compared to the saving of one salary/contractor fee through the huge resulting boost to efficiency, easily providing payback in the first year.
So how will accountants persuade their business clients to adopt business systems as a strategy?
If every accountant were to collect the above data from every one of its clients the very next time they meet (it takes 10 minutes) and then calculated the efficiency to be gained in bottom-line terms from installing all the above systems that are missing, it would show a huge potential payback.
But realistically, implementing everything over 3 years would sensibly ensure good use of time and no diversion from core business activities. Through gradual purchase and installation of systems, gradual benefits will accrue, making the project cost-free, ongoing.
Not only can a go-ahead accountant help a business owner to identify the right systems and suppliers, but through their own high familiarity of installing and using systems in their practice, they can help implementation.
So, a Runagood® Business accountant is already equipped to carry out a free online assessment of any business’s productivity potential and identify the systems that will deliver it. Book an appointment here
And it’s well worth remembering that every £ of increased productivity goes directly to the bottom line as free net profit.
*Enterprise Resource Planning. The core processes needed to run a company: finance, HR, manufacturing, supply chain, services, procurement, integrated into a single system.